Pressure Mounts on Washington; Deal May Be Close

For a moment, put yourself in the position of an American soldier serving in bone-dry Afghanistan and preparing to go on a dusty, life-threatening patrol with your buddies.

The President addresses the nation moments after this blog entry was posted. (TV Screenshot/Dick Bergeron)

Now, also imagine yourself hearing directly from Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff, telling you that he cannot assure that your paycheck will be deposited in your account for you and your family because, “if the stale­mate in Wash­ing­ton is not resolved before the August 2nd dead­line, then he can­not guar­an­tee they will con­tinue get­ting their paychecks.”

Say what?

That is just how absurd and irresponsible this situation has become.  As of this writing, The Wall Street Journal and other legitimate financial sources are reporting that a deal is in the works between The White House and Congress.

However, even should a deal be struck before the witching hour nominally said to be next Tuesday at midnight, the politicians playing in Washington’s sandbox have been throwing so much sand around that it is now beginning to get into the eyes of us Americans.

It is unspeakably irresponsible for Inside-the-Beltway Politicians from the President on down,  to have held American servicemen and women, Social Security recipients, people on unemployment compensation, and the needy, captive to their madness when, in fact, funds will be available in August for the categories of recipients which I have just named.

Between August 3^rd and the end of the month, U.S. Treasury data made available by the Bipartisan Policy Center and Bloomberg Government show that $172.4 billion of revenues will flow into the Treasury and that there will be $306.7 billion owed, leaving a shortfall of $134.3 billion.  Obviously, that is not a pretty picture.

However, if payments were to be prioritized as shown below, (my selection), there would be enough cash to cover the items listed:

Military active duty pay, $2.9B; Veterans Affairs Programs, $2.9B; Interest on Treasury Securities, $29B; Social Security Benefits, $49.2B; Medicare, $28.6B; Medicaid, $21.4B; Unemployment Insurance Benefits, $12.8B; Temporary Assistance for Needy Families, $2.2B; Food & Nutrition Service/Food  Stamps, $7.1B; Federal Salaries & Benefits, $14.2B.

Total:  $170.3 billion, just shy of the $172.4 billion of anticipated monthly receipts after August 3^rd. 

If I could easily calculate such a potential prioritization of payments on a Sunday afternoon, using the Federal Government’s own data as reported by the BPC and Bloomberg, so could the staffs of The White House, the U.S. Treasury and Congress. 

Indeed, they might already run similar scenarios, but they may not have wanted you to know.  Instead, they chose obfuscation which, under these economic conditions is – unintended or not – a scare tactic.

I am hopeful that the National Debt Ceiling Crisis will be resolved by Washington power brokers before next Tuesday, August 2^nd.  But their acidic antics and intimidating public statements may have damaged their credibility with Americans.

Thanks for reading.  Stay cool.